Official blog of Gurcharan Das. He is the author of India Grows at Night: A Liberal Case for a Strong State (Penguin 2012);The Difficulty of Being Good: On the Subtle Art of Dharma (2009),India Unbound (2000),a novel,A Fine Family (1990),a book of essays The Elephant Paradigm (2002) & an anthology of plays,Three plays (2003). He writes a regular column for the Times of India and 5 Indian language papers and occasional pieces for the Wall Street Journal, Financial Times, and Time magazine.

Sunday, August 12, 2012

Don't turn Gurgaon into a Faridabad

It was the same question on everyone's lips. Aggrieved
Suparna Prasad Dev asked, "If 50 policemen were at the scene, why didn't
they act when a hundred Maruti workers brutally attacked managers and killed my
husband?" When the police did finally act, it was too late. The factory
was in flames, almost a hundred managers were bleeding, many injured seriously.
Awanish Kumar Dev, head of human relations, was dead.

There are many
lessons in the recent tragedy at the Maruti-Suzuki factory at Manesar in
Gurgaon district. One of them is that labour trouble is not only a management's
or a union's problem but a vital concern of the state. Haryana has not learned
this lesson. It destroyed the vibrant industrial town of Faridabad more than a
generation ago due to poor industrial relations. It is now bent on scaring
industry away from Gurgaon as well. Last year's unrest at Maruti resulted in Rs
2,500 crore loss. This is a shockingly high figure-half a billion dollars-for
any company to lose anywhere in the world from industrial trouble. For Suzuki,
whose Indian operation brings in half its global profit, it is appalling. For a
Japanese company to be continuously in the news for labour unrest is
extraordinary when Japan has taught teamwork and industrial harmony to the world.
Suzuki should ask itself if it has the right persons in charge.

The role of the
state is less obvious. In the 1970s, Faridabad had an active municipal
government, fertile agriculture, a direct railway line to Delhi, and a host of
industries. Gurgaon at the time was a sleepy village with rocky soil and
pitiable agriculture. It had no local government, no railway link and no
industries. Compared to Faridabad, it was wilderness. Thirty years later
Gurgaon has become the symbol of a rising India. Called 'Millennium City', it
has dozens of shiny skyscrapers, 26 shopping malls, seven golf courses,
countless luxury showrooms of the world's most famous brands. It has 32 million
square feet of commercial space and is home to the world's largest
corporations. Its racing economy is reflected in fabled apartment complexes
with swimming pools, spas and saunas, which vie with the best gated communities
anywhere. How did this happen?

Gurgaon's
disadvantage turned out to be an advantage. It had no municipality and was more
or less ignored by the state government. This meant less red tape and fewer
bureaucrats who could block its development. Seeing its stupendous rise, people
began to ask, why do we need a government at all - with corrupt politicians and
unresponsive bureaucrats? When they saw prosperity spreading across the nation
amidst governance failure, they cynically claimed, "India grows at night
when the government sleeps." But the Maruti incident teaches that India
also needs to grow during the day. It needs an effective state. An alert police
could have prevented the tragedy. Rational labour laws would have stopped
Maruti from hiring contract workers, whose status and benefits are at the root
of the worker unrest. If red tape and corruption are the downside of Faridabad's
governance model, then the problem with Gurgaon's laissez faire model is the
lack of basic services-it has no functioning sewage system; no reliable
electricity or water supply; no decent roads or public transport.

A sensible company
in India will not hire a permanent worker today because of our senseless labour
laws. Instead, it hires contract workers to which it denies long-term benefits.
Meant to protect workers, the laws have harmed them. They are the main reason
why India has not been able to create a manufacturing revolution and create
more jobs. The spread of contract labour has reduced the bargaining power of
unions as well, who now represent less than 4% of India's workers. Nowhere in
the world has so much harm been done by a piece of legislation.

The lesson from the
Maruti story is that India cannot forever grow at night. It must have an
effective state which upholds the rule of law and grows during the day. Neither
Faridabad's nor Gurgaon's model of governance are the right ones. Haryana
should ponder over the vigorous competition that exists between the states for
investment. It will lose out to the states that offer better governance.

6 comments:

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WE ARE A GROUP OF (MOSTLY) YOUNG PEOPLE WHO ARE IN THE PROCESS OF ESTABLISHING A NEW POLITICAL PARTY AND ARE LOOKING FOR MENTORS SUCH AS YOURSELF. WOULD YOU BE INTERESTED IN DISCUSSING THIS? IF SO, PLEASE CALL ME AT 9818148602 OR SEND AN EMAIL TO ASTHANA1@YAHOO.COM.

The idea that Gurgaon grew due to the relative absence of a Govt. is a good insight. Indeed, if the politicians would just get out of the way and limit so called Government to the basic domains of law & order and common facilities, private enterprise can do much better in most other fields. But the bane of the country is that the political class want to wring the last drop of blood from the veins of hardworking entrepreneurs, not providing anything in return. Gurgaon is prime example - it contributes almost half the revenue of Haryana but the spending on its essential facilities is not even proportional to its population, much less the revenue! Minimal government is the best government...

About Me

Gurcharan Das has recently published a new book, India Grows at Night: A liberal case for a strong state (Penguin 2012). He is also general editor for a 15 volume series, The Story of Indian Business (Penguin) of which three volumes have already appeared.
He is the author of The Difficulty of Being Good: On the subtle art of dharma (Penguin 2009) which interrogates the epic, Mahabharata, in order to answer the question, ‘why be good?’ His international bestseller, India Unbound, is a narrative account of India from Independence to the global information age, and has been published in 17 languages and filmed by BBC. He writes regular column for several news papers and periodic guest columns for the Wall Street Journal, Financial Times, Foreign Affairs, and Newsweek. Gurcharan Das graduated with honors from Harvard University in Philosophy, Politics and Sanskrit. He later attended Harvard Business School. He was CEO of Procter & Gamble India and later Managing Director, Procter & Gamble Worldwide (Strategic Planning). In 1995, he took early retirement to become a full time writer.
Visit http://gurcharandas.org for his complete work and profile.